Mty Food Group Inc. · TSX:MTY
Mty Food — Q1 2024 Earnings Presentation
29 slides from Mty Food's earnings presentation, Apr 12, 2024
Slide 1: Investor Presentation
Apri l 17, 2024 INVESTOR PRESENTAT ION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may contain written and oral statements that constitute forward-looking statements. These forward-looking statements may involve, but are not limited to, comments with respect to our business or financial objectives, our strategies or future actions, our
Slide 3: Non-GAAP Measures, Non-GAAP Ratios and Supplementary Financial Measures
NON-GAAP MEASURES, NON-GAAP RATIOS AND SUPPLEMENTARY FINANCIAL MEASURES Unless otherwise indicated, the financial information presented below, including tabular NON-GAAP RATIOS amounts, is expressed in Canadian dollars and prepared in accordance with International Financial Reporting Standards (“IFR
Slide 4: Investment Thesis
INVESTMENT THESIS • Proven consolidator with disciplined acquisition strategy • Track record of growth • Strong cash flow generation ability • Recurring revenue streams in the franchising segment • Diversified portfolio of approximately 90 brands • Knowledgeable and committed team • Well positioned
Slide 5: MTY Group at a Glance
MTY GROUP AT A GLANCE Franchises and operates quick-service, fast casual and casual dining restaurants 90 brands MTY Group Underlying Network International 3% Non-traditional Food court 22% 16% 42% 34% Corporate Franchise Stores $1,162M Operation 65% $5.6B 32% 7,112 LTM Q1-2024 US LTM Q1-2024 Cana
Slide 6: Diversified Portfolio of Approximately 90 Brands
DIVERSIFIED PORTFOLIO OF APPROXIMATELY 90 BRANDS Protects MTY from shifts in customer preferences Asian & Indian Frozen treats & smoothies American Sandwiches & salads Mediterranean Italian Breakfast Mexican Coffee & snacks 6
Slide 7: Strong Brands Make Up a Large Part of Portfolio
STRONG BRANDS MAKE UP A LARGE PART OF PORTFOLIO Top 10 brands represent 65% of system sales(1) Frozen treats & smoothies represent 32% of locations Breakfast 3% Italian 2% Mediterranean 1% Mexican 7% Sandwiches & salads 6% 32% 36% $5.6B 64% Coffee & snacks 7,112 Frozen treats & smoothies Other Brand
Slide 8: International Network in 40 Countries
INTERNATIONAL NETWORK IN 40 COUNTRIES 7,112 locations and $5.6B in system sales (1) for LTM Q1-2024 Canada International 2,493 $1,776M 508 $153M US 4,111 $3,681M (1) This is a supplementary financial measure. Please refer to page 3 of this presentation. 8
Slide 9: Creating a More Sustainable MTY
CREATING A MORE SUSTAINABLE MTY PLANNING FOR THE FUTURE AND WORKING TOWARDS DELIVERING POSITIVE, LONG-TERM OUTCOMES FOR ALL Our 2022 Sustainability Report Aligning to the UNITED NATIONS SUSTAINABLE Update can be found here. DEVELOPMENT GOALS PILLARS FOOD We Serve PLANET We Live On PEOPLE We Interact
Slide 10: Strategy & Future Growth
STRATEGY & FUTURE GROWTH 10
Slide 11: Growth Strategy – Increasing Market Share
GROWTH STRATEGY – INCREASING MARKET SHARE LEVERAGING DEVELOPPING our solid platforms to expand our Canadian brands throughout North America in the US FOCUSING SEEKING on high quality of revenues that international Master franchise are recurring in nature opportunities IMPROVING UPGRADING MTY’s digit
Slide 12: Growth Strategy – Acquisitions
GROWTH STRATEGY – ACQUISITIONS REINFORCING Canadian platform by regions Strong reputation for paying a ‘fair’ price LEVERAGING our US platform to integrate acquisitions PROVIDING Experienced integration team additional depth and breadth in offering PAYING FAIR PRICE for good quality earning potentia
Slide 13: Financial History
FINANCIAL HISTORY 13
Slide 14: Track Record of Growth
TRACK RECORD OF GROWTH Revenues (M$) Adjusted EBITDA(1) (M$) Normalized Adjusted EBITDA(1) 272 267 1,169 1,162 271 267 169 187 169 182 717 138 138 511 552 2020 2021 2022 2023 LTM 2020 2021 2022 2023 LTM 2020 2021 2022 2023 LTM Q1-24 Q1-24 Q1-24 Net Income (Loss) (M$) Operating Cash Flow(2) (M$) FCF
Slide 15: Network Evolution
NETWORK EVOLUTION System Sales by System Sales by Geography (M$) (1) Type (M$)(1) 5,610 5,610 3,459 3,459 2020 2021 2022 2023 LTM 2020 2021 2022 2023 LTM Q1-24 Q1-24 Canada US International Food Court Street front Non-traditonal Locations by Type Locations by Geography 7,001 7,112 7,001 7,112 2020 2
Slide 16: Growing Normalized Adjusted EBITDA Consistently
GROWING NORMALIZED ADJUSTED EBITDA(1) CONSISTENTLY Normalized Adjusted EBITDA as a % of Revenues (2) is primarily driven by the franchising segment 300 55% $267M 250 48% 49% 50% 48% 49% 51% 45% 45% 50% 200 35% 34% 34% 31% 150 27% 31% 28% 26% 23% 23% 100 50 $51M - 2015 2016 2017 2018 2019 2020 2021 2
Slide 17: Optimizing Financing Structure
OPTIMIZING FINANCING STRUCTURE Maintaining a solid balance sheet 800 3.3x 3.2x 3.0x 600 2.7x 2.6x 2.6x 400 1.8x $686M Acquisition of Kahala 1.8x 1.9x 200 0.3x - 2015 (1) 2016 2017 2018 2019 2020 2021 2022 2023 LTM Q1-24 Net Debt (2) Net Debt / LTM Norm. Adj. EBITDA(3) (1) On a total debt basis (2) N
Slide 18: Increasing Dividends Consistently
INCREASING DIVIDENDS CONSISTENTLY Dividend typically represents 15-20% of FCF(1) Dividend payments $1.12 restored as $1.00 at July 9 $0.84 Temporarily $0.66 suspended $0.60 the dividend in response $0.46 to COVID-19 $0.46 $0.40 $0.37 The number of shares $0.19 increased in 2017 2015 2016 2017 2018 2
Slide 19: Q1-2024 Results
Q1-2024 RESULTS 19
Slide 20: Q1-24 Normalized Adjusted EBITDA
Q1-24 NORMALIZED ADJUSTED EBITDA (1) Normalized adjusted EBITDA(1) decreased 7% YoY in Q1-2024 Normalized adjusted EBITDA as a % of revenue (2) was 21% in Q1-2024. $64.0M $64.0M $59.5M $59.5M Q1-23 Q1-24 Q1-23 Q1-24 Franchise Corporate Food processing, distribution & retail Canada US & International
Slide 21: Q1-24 Metrics
Q1-24 METRICS Normalized Adjusted EBITDA / share(1) Net income FCF net of lease Net income / diluted $18.5M $17.4M payments / diluted share $2.62 $2.46 share(1) $0.75 $0.71 $1.52 $0.63 Q1-23 Q1-24 Q1-23 Q1-24 Q1-23 Q1-24 Q1-23 Q1-24 FCF net of lease payments/diluted share more than double due to an
Slide 22: Q1-24 Healthy Financial Position
Q1-24 HEALTHY FINANCIAL POSITION Healthy cash position of $50.6M and $900M revolving credit facility, of which US$536.3M had been drawn at quarter-end Net Debt(1) Revolver $781M $900M $900M $900M $900M $754M $730M Higher flexibility and $600M $708M $686M lower cost thanks to various hedging strategi
Slide 23: Appendix
APPENDIX 23
Slide 24: Knowledgeable and Committed Management Team
KNOWLEDGEABLE AND COMMITTED MANAGEMENT TEAM Eric Lefebvre Renée St-Onge Jenny Moody Jason Brading Marie-Line Beauchamp Chief Executive Officer Chief Financial Officer Chief Legal Officer COO Canadian Quick COO Canadian Casual Service Restaurants Dining Restaurants Marc Benzacar Jeff Smit Al Hank Ada
Slide 25: Milestones in ~45-Year History
MILESTONES IN ~45-YEAR HISTORY MTY has realized over 50 brand acquisitions since 1999* 1st acquisition: • Fontaine Santé Acquires Acquires Kahala Brands Papa Murphy’s Listed on Vancouver Acquires Stock Exchange Acquires BBQ Holdings Acquires • Ca s a Grecque Acquires Acquires • The Works Burger • So
Slide 26: Typical Seasonality of MTY Results
TYPICAL SEASONALITY OF MTY RESULTS System sales(1) fluctuate with the seasons Q1 Q2 Q3 Q4 Dec-Jan-Feb March-Apr-May June-July-Aug Sept-Oct-Nov Winter Spring Summer Fall Sales for Frozen treats & SOFT STRONG STRONGEST SOFT smoothies Sales for Papa Murphy’s STRONG STRONG SOFT STRONGEST Sales for Wetze
Slide 27: Stock Price Performance Since Listed on TSX
STOCK PRICE PERFORMANCE SINCE LISTED ON TSX As at April 12, 2024, management and the Board own 16% of shares 80 Shares outstanding 24.2M Float 20.2M 52 week average daily volume 38,157 60 52 week high-low (intraday) $68.60-$44.48 Market capitalization $1.1B April 12 $45.16 40 20 0 May-10 May-11 May-
Slide 28: Valuation Conundrum
VALUATION CONUNDRUM Calculations based on Q1-24 data (in thousands except stock price) Bloomberg / Factset MTY Stock price as a t February 29, 2024 $50.50 $50.50 # s hares 24,165 24,165 Market cap. $1,220,341 $1,220,341 Bloomberg & LTD 727,120 727,120 Factset do not account for Current LTD 9,036 9,0
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